The United States Is Insolvent

[Solve et Coagula]

THE UNITED STATES IS INSOLVENT

by Dr. Chris Martenson
The End of Money

December 17, 2006

Prepare to be shocked.

The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.

That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government (Download here: http://fms.treas.gov/fr/06frusg/06frusg.pdf ) that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. Sometimes I wonder why the Treasury Department doesn't just pay somebody to come in at 4:30 am Christmas morning to release the report. Additionally, I've yet to read a single account of this report in any of the major news media outlets but that is another matter.

But, hey, I understand. A report is this bad requires all the muffling it can get.

In his accompanying statement to the report (Download here: http://fms.treas.gov/fr/06frusg/06gao2.pdf ), David Walker, Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government's accounting systems that the GAO was "unable to express an opinion" on the financial statements. Ha ha! He really knows how to play an audience!

In accounting parlance, that's the same as telling your spouse "Our checkbook is such an out of control mess I can't tell if we're broke or rich!" The next time you have an unexplained rash of checking withdrawals from that fishing trip with your buddies, just tell her that you are "unable to express an opinion" and see how that flies. Let us know how it goes!

Then Walker went on to deliver the really bad news:

Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government's total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation's total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.

As this long-term fiscal imbalance continues to grow, the retirement of the "baby boom" generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.

Given these and other factors, it seems clear that the nation's current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation's large and growing long-term fiscal imbalance.

Continue to read:
http://www.financialsense.com/fsu/editorials/martenson/2006/1217.html

[schizoid_lost_boy]

well *indeed*, the USA is getting poor because americans don't have any thing to sell, these are the contradictions of capitalism which Lenin spoke about. Capitalism will collapse in about 10-30 years coz the system is not rational nor sustainable, capitalism is an obsolete system that could only work when societies didn't have a lot of people, capitalism is like a monarchy, i mean capitalism is very obsolete, very backward coz it has contradictions like an excess of wealth in very few hands, and an excess of production (excess of supply) combined with poor hungry consumers (low demand), this defaults any national economy

schizoid_lost_boy

[Astroboy]

Actually, I think that the societies hadn't thought outside of the box to have fewer people, if they did they'd balance the richies and the poories equally.

[Demonskates]

Looks like the U.S. needs to start collecting on debts owed to us by other countrys.
Like Japan and Germany post WWII.We rebuilt them,and they never paid us back.
Or mabey we should stop helping every poor nation anytime they beg us for help.
And quit playing global police all the time.

[Cartesiantheater]

well *indeed*, the USA is getting poor because americans don't have any thing to sell, these are the contradictions of capitalism which Lenin spoke about. Capitalism will collapse in about 10-30 years coz the system is not rational nor sustainable, capitalism is an obsolete system that could only work when societies didn't have a lot of people, capitalism is like a monarchy, i mean capitalism is very obsolete, very backward coz it has contradictions like an excess of wealth in very few hands, and an excess of production (excess of supply) combined with poor hungry consumers (low demand), this defaults any national economy

schizoid_lost_boy
Dude, capitalism would do just fine, if it was global. And guess what? The very same thing applies to communism!

Neither one can be successful unless the entire world is conquered and run by the same system!

By the way, your "contradiction" of capitalism, if it were true, would mean that there would be no life, because evolution is capitalism. The fact of the matter is, both systems will work fine if they are global. Capitalism has a built in way to deal with over population (people starve to death); I'm not sure what communsim's solution to that problem is, but I know they have one. Perhaps someone could enlighten me?

[Apollo]

Looks like the U.S. needs to start collecting on debts owed to us by other countrys.
Like Japan and Germany post WWII.We rebuilt them,and they never paid us back.
Or mabey we should stop helping every poor nation anytime they beg us for help.
And quit playing global police all the time.

Agreed... Although I think all of that diplomacy is necessary because if we dont kiss a few asses out there we will be left with nothing but enemies... There has got to be a happy medium

[Demonskates]

Dude, capitalism would do just fine, if it was global. And guess what? The very same thing applies to communism!

Neither one can be successful unless the entire world is conquered and run by the same system!

By the way, your "contradiction" of capitalism, if it were true, would mean that there would be no life, because evolution is capitalism. The fact of the matter is, both systems will work fine if they are global. Capitalism has a built in way to deal with over population (people starve to death); I'm not sure what communsim's solution to that problem is, but I know they have one. Perhaps someone could enlighten me?
Yeah it was called Siberia........................................... .............................

[Jupiter]

I think the U.S.A. should massively scale back it's defence expenditure. (Stopping saying things like "Bring it on" should save tens of billions of dollars or more just by not saying one or two sentences in annoucements here and there). In respect of the arms sales that U.S.A has conducted, certainly that may have brought in some billions, but multiples-more billions are spent on the massive defence budget, which grows ever higher and ever more unaffordable.

[2Hybrids]

Another suggestion is to completely halt illegal immigration and toss every one of those illegal folks outta here!!! Hopefully, that'll make some of those fat-arse, welfare-grubbing Yanks do some work! If not, you can cut their welfare checks!

I've always envied Canada and Australia for their approach to world situations. They may have enemies, but not as many as the U.S. They don't have a massive military and don't need it. The U.S. needs to tone down its "better than everyone else" rhetoric, aid to countries that have no desire to help themselves, take care of its own, respect other people's laws and customs, ....and start saving money!

[Kohler]

Another suggestion is to completely halt illegal immigration and toss every one of those illegal folks outta here!!! Hopefully, that'll make some of those fat-arse, welfare-grubbing Yanks do some work! If not, you can cut their welfare checks!


Yes. Because we fat-arse yanks love illegal immigrants. Well said.

[Cartesiantheater]

Yes. Because we fat-arse yanks love illegal immigrants. Well said.
do I sense a touch of sarcasm?... :amaz:

[Raptor Witness]

Yeah it was called Siberia........................................... .............................
............. :52: :nibble: :Bott:...............

[shawnee]

Okay, okay okay; we get it we're BROKE in reality. Sooooo, to mitigate the situation on a personal basis, folks, how do we get our families thru when we suddenly tank in the real world? We personally have no credit card debt - cleaned that up this summer; vehcles (such as they are) are paid for, living in the country on 14 orchard. Not much in savings, little in mutual funds; if the SHTF we won't be out a lot and hyper-inflation won't exhaust our $ as we have little to exhaust.

I mean, we're about as close to the bone and under-extended as possible.
What shape you all in? What move would you be willing to make if you found yourself with your back to the wall?

[Jake99]

Capitalism is the most destructive system ever to inhabit the world.

[Cartesiantheater]

Capitalism is the most destructive system ever to inhabit the world.
No it isn't. There have been MANY more famines in non-capitalist dictatorship and authoritarian governments... capitalism IS destructive in some areas, but over all it forces more efficiency (or extinction)...

There is a lot of bad in capitalism, but there is good too. Individualism, for example, has a much better shot in a capitalist society than a communist...

Although I suppose it's all a matter of what you consider good. Why can't there be a happy medium, like Canada? Plenty of socialist tendencies, but still capitalism... right?

[carini]

No it isn't. There have been MANY more famines in non-capitalist dictatorship and authoritarian governments... capitalism IS destructive in some areas, but over all it forces more efficiency (or extinction)...

There is a lot of bad in capitalism, but there is good too. Individualism, for example, has a much better shot in a capitalist society than a communist...

Although I suppose it's all a matter of what you consider good. Why can't there be a happy medium, like Canada? Plenty of socialist tendencies, but still capitalism... right?


Famines and population decline arent necessarily bad things. They alleviate environmental destruction. Personally I would rather see the earth with 2 billion people then our current 6 billion. We will head back down to lower population levels soon enough though.

Thanks to capitalism everything is for sale. There is nothing sacred anymore.

[TC]

Famines and population decline arent necessarily bad things. They alleviate environmental destruction. Personally I would rather see the earth with 2 billion people then our current 6 billion. We will head back down to lower population levels soon enough though.

Thanks to capitalism everything is for sale. There is nothing sacred anymore.


It's a good possibility several countries in the world would disagree with this mind set.....at least the ones who are starving anyway.

[uki]

Looks like the U.S. needs to start collecting on debts owed to us by other countrys.
Like Japan and Germany post WWII.We rebuilt them,and they never paid us back.
Or mabey we should stop helping every poor nation anytime they beg us for help.
And quit playing global police all the time.if america would stop bombing other countries, then it wouldn't have to pay to rebuild them all... like, duh.
every country is in debt; world economy is based on being in debt. because a people who are in debt, are a people easily controlled.